Steve Hach is the Senior Editor at ValuEngine.com, a Melbourne, Florida-based stock valuation and forecast service. ValuEngine utilizes Ivy League financial research as the basis for its coverage of more than 8000 US, Canadian, and other foreign stocks. Hach utilizes ValuEngine's complex... More

The ValuEngine Weekly is an Investor Education newsletter focused on the quantitative approach to investing and the tools available from ValuEngine. In today's fast-moving and globalized financial markets, it is easy to get overloaded with information. The winners will adopt an objective, scientific, independent and unemotional approach to investing. If you are not yet a member of ValuEngine's stock analysis service, sign up now for a two-week free trial atwww.valuengine.com!

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VALUATION WATCH: Our models find that overvaluation is approaching levels typically seen when a market correction is imminent. Overvalued stocks now make up 64% of our universe and 30% of the universe is calculated to be overvalued by 20% or more. ALL Sectors are now calculated to be overvalued.

As a bonus to our Free Weekly Newsletter subscribers, we are now offering a FREE DOWNLOAD of one of our $ 25.00 Detailed Valuation Reports.

This week's free download is our report on Pain Therapeutics (PTIE, $PTIE). ValuEngine has issued a STRONG BUY recommendation for Pain Therapeutics on Jan. 28, 2011. Based on the information we have gathered and our resulting research, we feel that Pain Therapeutics has the probability to OUTPERFORM average market performance for the next year. The company exhibits ATTRACTIVE expected EPS growth, momentum and market valuation.

Based on available data as of today, we believe that PTIE should be trading at $7.444. This makes PTIE 14.20% undervalued. Fair Value indicates what we believe the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. For PTIE, we base this on actual earnings per share (NYSEARCA:EPS) for the previous four quarters of -$0.11, forecasted EPS for the next four quarters of $0.25, and correlations to the 30- year Treasury bond yield of 4.56%.

When we recently screened for top-ranked stocks in both short and long-term forecast projections that had a minimum share price of $3.00 and average daily volume of 100k shares/day, PTIE finished third in our results. The long-term forecast figures are very impressive and lead to the ticker's rating of STRONG BUY. The one-year forecast figure ranks in the top 1% of our universe of more than 5500 stocks.

Pain Therapeutics is developing a new generation of opioid painkillers. Opioids are drugs derived from the poppy plant. The company uses technology to reformulate opioid drugs, such as morphine, into new painkillers with improved clinical benefits. The company has four opioid painkillers in Phase II clinical trials. The company believes its drugs offer enhanced pain relief, fewer adverse side effects and reduced tolerance and addiction compared to existing opioid painkillers.

Yesterday, Pain Therapeutics, Inc. announced that the U.S. FDA has accepted a New Drug Application resubmission for REMOXY. REMOXY is designed to provide steady, around-the-clock pain relief, while resisting common methods of tampering intended to result in the rapid release of oxycodone.

If you have not subscribed and want to be able to receive a FREE $ 25.00 Detailed Valuation Report, you can subscribe to our Free Weekly NewsletterHERE.

ValuEngine Index Overview

Index

Week Open

Thurs. Close

Change

% Change

YTD

DJIA

11873.5

11989.8

116.3

0.98%

2.43%

NASDAQ

2693.03

2755.28

62.25

2.31%

1.54%

RUSSELL 2000

773.71

795.43

21.72

2.81%

-0.67%

S&P 500

1283.29

1299.54

16.25

1.27%

1.95%

ValuEngine Market Overview

Summary of VE Stock Universe

Stocks Undervalued

35.62%

Stocks Overvalued

64.38%

Stocks Undervalued by 20%

15.43%

Stocks Overvalued by 20%

30.53%

.

ValuEngine Sector Overview

Sector

Change

MTD

YTD

Valuation

Last 12-MReturn

P/E Ratio

Oils-Energy

0.15%

2.99%

2.99%

29.35% overvalued

39.60%

48.06

Basic Materials

-1.08%

-3.71%

-3.71%

18.77% overvalued

52.64%

39.26

Auto-Tires-Trucks

1.69%

3.01%

3.01%

18.02% overvalued

42.91%

20.77

Multi-Sector Conglomerates

0.24%

4.79%

4.79%

17.97% overvalued

40.05%

35.08

Business Services

0.23%

2.74%

2.74%

14.94% overvalued

22.34%

33.27

Transportation

0.21%

-0.15%

-0.15%

14.65% overvalued

31.19%

28.52

Industrial Products

0.07%

1.48%

1.48%

13.97% overvalued

34.07%

32.78

Computer and Technology

0.37%

10.09%

3.97%

11.99% overvalued

39.49%

37.52

Aerospace

0.19%

4.80%

4.80%

11.58% overvalued

37.90%

19.22

Finance

0.47%

1.65%

1.65%

9.10% overvalued

19.73%

28.28

Utilities

-0.14%

0.79%

0.79%

8.64% overvalued

18.67%

20.69

Retail-Wholesale

0.34%

-0.66%

-0.66%

8.19% overvalued

28.96%

26.73

Consumer Staples

-0.34%

0.38%

0.38%

7.24% overvalued

20.88%

24.85

Consumer Discretionary

0.35%

0.54%

0.54%

6.50% overvalued

25.27%

31.00

Construction

-0.32%

4.73%

4.73%

4.32% overvalued

17.76%

29.91

Medical

0.10%

2.82%

2.82%

0.31% overvalued

20.10%

36.06

Sector Talk--Transportation

Transportation has been in the news for a variety of reasons of late. Good news for some airlines continues as the major carriers reap the rewards of the numerous fees, hedging schemes, and capacity changes implemented in the wake of the big jump in fuel costs from a few years ago. Recent ticket price increases seem to have more staying power as even low-cost giant Southwest has fallen in line.

On the other hand, bad news has been the rule for maritime bulk shippers as the Baltic Dry Bulk Index amply illustrates. This time around rising commodities costs don't seem to help the shippers as they suffer from a big jump in capacity as additional carriers --ordered near the end of the bubble back in 2006-2008--are now completed.

Below, we present top-five lists for the Transportation Sector from our Institutional software package (Pending:VEI). These results were filtered by market price and volume--no results below 3$/share or less than 100k shares/day. Investors beware, while our models have been quite astute with airline stocks for months now, the crazy action of the dry bulk shippers has given them fits.

Top-Five Transportation Stocks--Short-Term Forecast Returns

Ticker

Name

Mkt Price

Valuation(%)

Last 12-M Retn(%)

YRCW

YRC WORLDWD INC

4.37

-75

-80.36

EXM

EXCEL MARITIME

4.71

-49.54

-24.28

AMR

AMR CORP

7.56

-45.08

-0.53

EGLE

EAGLE BULK SHPG

4.11

-15.53

-21.86

DRYS

DRYSHIPS INC

4.81

-41.43

-18.75

Top-Five Transportation Stocks--Long-Term Forecast Returns

Ticker

Name

Mkt Price

Valuation(%)

Last 12-M Retn(%)

KSP

K-SEA TRANSPORT

5.28

-65.58

-64.52

YRCW

YRC WORLDWD INC

4.37

-75

-80.36

CHRW

CH ROBINSON WWD

77.74

15.08

38.08

UPS

UTD PARCEL SRVC

72.91

1.63

26.51

OSG

OVERSEAS SHIPHO

32.45

-31.58

-26.3

Top-Five Transportation Stocks--Composite Score

Ticker

Name

Mkt Price

Valuation(%)

Last 12-M Retn(%)

UNP

UNION PAC CORP

95.34

6.83

52.08

NSC

NORFOLK SOUTHRN

62.31

-0.91

26.65

UPS

UTD PARCEL SRVC

72.91

1.63

26.51

LUV

SOUTHWEST AIR

12.49

-21.85

9.85

LCC

US AIRWAYS GRP

11.05

-50.61

127.37

Top-Five Transportation Stocks--Most Overvalued

Ticker

Name

Mkt Price

Valuation(%)

Last 12-M Retn(%)

ACLI

AMER COMML LINE

32.99

67.03

82.06

CPLP

CAPITAL PRODUCT

9.81

65.05

22.47

ODFL

OLD DOMINION FL

33.37

54.28

83.76

GBX

GREENBRIER COS

24.43

51.75

187.75

NMM

NAVIOS MARITIME

18.87

49.88

20.73

Subscribers can check out the latest valuation, forecast, and ratings figures on Transportation from our Models HERE.

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ValuEngine Chief Market Strategist Richard Suttmeier is a financial analyst for media such as Fox News, CNBC,YahooFinance,the Wall Street Journal, New York Times, CNNfn, and Bloomberg, Suttmeier has long been one of ValuEngine's "power users," supporting his own technically-focused analysis with VE's fundamentally-based quant methods.

Last week, Richard appeared at the Orlando, Florida chapter of the American Association of Individual Investors (AAII) to discuss his market outlook for 2011, his method of stock picking using ValuEngine and Technical Analysis, and the "Buy and Trade" strategy upon which his popular ValuTrader Model Portfolio Newsletter is based.

Suttmeier spoke to a crowd of @80 local investors and was very well-received. Richard eschewed the typical sales pitch and focused on his market views as well as the nuts and bolts of the strategy underlying his successful ValuTrader Model Portfolio Newsletter.

We have created a special presentation section on our website and posted Suttmeier's Power Point slides from the AAII meeting. In the future, we will post similar presentations of interest to subscribers.

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